Colorado Adopts Equal Pay Transparency Rules to Clarify Recent Amendments to State’s Equal Pay Law

Seyfarth Synopsis: Colorado has adopted final Equal Pay Transparency Rules which, along with the underlying equal pay law amendments, will become effective January 1, 2024.

As we previously reported here, on June 5, 2023, Colorado Governor Jared Polis signed SB-23-105 into law amending its Equal Pay for Equal Work Act (the “Act”) to modify an employer’s pay transparency obligations for job postings and internal promotional opportunities.  The amended law also extended the statute of limitations for wage discrimination claims from three years to six years and created new mandates for Colorado’s Department of Labor and Employment (“CDLE”) with respect to the investigation, mediation, and enforcement of wage discrimination claims.  The amendments to the law will take effect January 1, 2024.

In line with these recent amendments, on September 29, 2023, the CDLE issued proposed Equal Pay Transparency Rules ("EPT Rules").  Following a public hearing and comment on the proposed rules, the CDLE has now adopted the final EPT Rules.  These Rules will become effective on January 1, 2024, along with the underlying Act’s amendments.  The EPT Rules provide clarity on some the Act’s posting and notice requirements as outlined below.

Career Development:  The amended law requires that employers make reasonable efforts to announce, post, or otherwise make known each “job opportunity” to employees.  The definition of “job opportunity” expressly excludes “career development” or “career progression,” thus eliminating the requirement in the law’s prior iteration to provide notice of in-line promotional opportunities.  “Career development” is defined as a “change to an employee’s terms of compensation, benefits, full-time or part-time status, duties, or access to further advancement in order to update the employee’s job title or compensate the employee to reflect work performed or contributions already made by the employee.”  The adopted EPT Rules now spell out that such existing work or contributions must be: (1) part of the employee’s existing job; and (2) not within a position with a current or anticipated vacancy.

Career Progression:  The amended Act defines “career progression” as “a regular or automatic movement from one position to another based on time in a specific role or other objective metrics,” and adds a requirement that for positions with “career progression,” an employer must disclose and make available to all “eligible employees” the requirements to obtain a career progression, in addition to each position’s terms of compensation, benefits, full-time or part-time status, duties, and access to further advancement.  However, the law as amended did not define “eligible employees.”  The EPT Rules now define “eligible employee” as, ” those in the position that, when the requirements in the notice are satisfied, would move from their position to another position listed in the notice as a ‘career progression.’”

Clarity on Post-Selection Notice Requirements:  The amended law added a requirement that employers disclose information regarding the candidate selected for a job opportunity to those employees with whom the selected candidate will regularly be working in the new role.  However, the amended law did not define the term “work with regularly.”  The adopted EPT Rules clarify that the term “work with regularly” means “employees who, as part of their job responsibilities, either (1) collaborate or communicate about their work at least monthly, or (2) have a reporting relationship (i.e., supervisor or supervisee).”  The EPT Rules further specify that employers may comply with this requirement by providing notice of either (1) each individual selection or (2) multiple selections, as long as the notice is provided no later than thirty days after any selection in the notice.  In addition, the EPT Rules clarify the exception in the Act of disclosing the name of a selected candidate where such disclosure would violate the candidate’s privacy rights under applicable law or place at risk the selected candidate’s health or safety, and identifies a procedure by which a selected candidate can inform an employer that they believe disclosure would put their health or safety at risk.

Acting, Interim, or Temporary (“AINT”) Hires: The amended law contemplates exceptions for temporary, interim, or acting job opportunities that necessitate immediate hire.  The EPT Rules provide that no immediate job opportunity posting is required to fill a position on an AINT basis for up to nine months (note that this was six months under the prior EPT Rules) where: (1) the AINT hiring is not expected to be permanent, and if the hire may become permanent, the required job opportunity posting must be made in time for employees to apply for the permanent position; and (2) the same or a substantially similar position was not held any time in seven or more of the preceding twelve months by another AINT hire for which there was no job opportunity posting, with certain additional timing limitations.   

Geographic Limits: The EPT Rules clarify that the job opportunity, post-selection, and career progression notice requirements do not require notice to employees entirely outside Colorado.

Application Deadlines: The amended Act added a requirement that employers disclose “the date the application window is anticipated to close.”  This requirement raised questions for many employers that have perpetual or ongoing job postings and do not utilize a fixed time frame for open opportunities.  The EPT Rules now provide some clarity on this ambiguity.  First, the Rules describe this requirement as employers having to disclose “the application deadline” in the job posting.  Second, the Rules specify that a deadline need not be included if the employer accepts applications on an ongoing basis and there is no fixed deadline to apply, as long as that is clearly stated in the posting.  Additionally, a deadline may be extended if (1) the original deadline was a good-faith expectation or estimate of what the deadline would be; and (2) the posting is promptly updated when the deadline is extended.

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Seyfarth’s Pay Equity Group is continuing to monitor this area for additional updates and is available to assist employers with navigating these new requirements and the overall ongoing trend toward greater pay transparency.